2012 Year in Review: The Biggest Business Moves In Technology, Social Media And Gaming

How did the business world help shape the tech industry in 2012? We look at some of the biggest business moves of the year.

Photo: Reuters

Every year, the harsh realities of the business world remind us that great ideas need more than good will to get off the ground. 2012 was no exception.

From the botched IPOs of web companies like Facebook (Nasdaq: FB), Zynga (Nasdaq: ZNGA), and Groupon (Nasdaq: GRPN) that fizzled out throughout the year to the unprecedented growth of startups like Kickstarter and Square, the intricacies of the financial industry played a heavy hand in the tech industry. Here are the top business moves of 2012 that will continue to shape the world of technology in 2013 and beyond.

Facebook’s IPO Misfire

Facebook’s entrance to Nasdaq was one of the most highly anticipated initial public offerings in recent history. It had all the right factors for a successful launch -- a strong brand identity, a massive and ever-increasing user-base, eager public interest in the future direction of the company. The only thing that was missing was a sustainable business model to actually monetize the social network’s user base. Ultimately, the IPO was stymied by technical, strategic, and even legal issues. By August, the company’s stock had fallen to half its original value. The debacle shook confidence in the realm of burgeoning web properties and ultimately prompted the SEC to review its own rules.

Zynga’s Struggle for Survival

Riding Facebook’s coattails to success as one of the seemingly fast-growing and endlessly profitable social media companies, Zynga gave the impression that it could somehow pull money out of thin air by convincing countless Facebook users to spend money on virtual trinkets. The problem? Convincing people to spend money on virtual goods is as hard as it sounds. The company has jettisoned countless CEOs, studios, and regional offices as its share price dipped into bearish territory in August. Promises to move into online gambling may just save the company, but in doing so it would also be abandoning the unique concept that made the company so oddly inspiring in the first place.

THQ’s Bankruptcy

THQ was never in the same league as Activision Blizzard (Nasdaq: ATVI) or Electronic Arts (Nasdaq: EA) when it came to video game industry publishers, but its struggles throughout 2012 showed the tense financial position the mainstream game industry has found itself in as young competitors like Zynga collected massive audiences by giving away their products for free. The fact that both traditional publishers and their newer rivals like Zynga both struggled through 2012 shows that the game industry, and digital media more generally, is still searching for a way forward in 2013.

Jack Dorsey Stepping Down From Square

The fact that Dorsey stepped down from an operational role at Twitter in and of itself may not be hugely important. When he finally announced that he was going to focus primarily on his new startup, many reports hinted that he had all but left Twitter’s creative helm long before that. But the fact that one of the tech industry’s top talents felt secure in stepping away from a service as popular as Twitter is a sign of the enormous presence mobile payment services like Square will soon have. 2013 will most likely be a pivotal year in the development of mobile technologies and the businesses that support them, and mobile payments will play a central role in that shift.

The Decline of “Daily Deals.”

Services like Groupon and LivingSocial seemed like great ideas in theory, but their struggle to remain financially solvent and culturally relevant throughout 2012 was a grim sign of the potential these types of web companies have in the coming years.

Groupon’s stock tumbled ten percent from its IPO value, and Amazon dropped more than 90 percent of its investment in LivingSocial. If these sorts of services have a place in the tech industry in coming years, it will probably be as a supporting party to other financial services like mobile payment companies. And companies like Square have already begun to experiment with different ways to offer similar opportunities within their services.